Pakistan, Afghanistan cut tariffs to 27% after signing Preferential Trade Agreement

• Agreement to come into effect on August 1 for one year.
• Will reduce tariffs on total of eight agricultural products.
• Afghan envoy terms development "win for farmers, traders".

ISLAMABAD: In a major move toward normalising ties, Pakistan and Afghanistan have signed a Preferential Trade Agreement (PTA) to reduce tariffs on eight agricultural products, The News reported.

The agreement, signed by senior commerce officials from both countries, will reduce the customs duties on four Afghan exports to Pakistan — grapes, pomegranates, apples and tomatoes — and four Pakistani exports to Afghanistan — mangoes, kinnows, bananas and potatoes.

Tariff rates on these items, which previously exceeded 60% will now be capped at 27%.

"This agreement will be effective for a period of one year, commencing on August 1, 2025," the Afghan embassy said on X.

"It is renewable and also allows for the inclusion of additional items in the future." The deal was signed by Afghanistan's Industry and Commerce Deputy Minister Mullah Ahmadullah Zahid and Pakistan's Commerce Secretary Minister Jawad Paul.

"A significant step forward in AFG-PAK economic ties. Delighted to witness the signing of the Preferential Trade Agreement between Afghanistan & Pakistan, reducing tariffs on key exports and opening doors for greater bilateral trade. A win for our farmers, traders, and shared prosperity," Kabul's Charge d'Affairs in Islamabad Sardar A Shakeeb said in a post on X.

The development comes months after Islamabad upgraded its diplomatic ties with Kabul to ambassadorial status back in May — a move replicated by the neighbouring country.

The two nations share a porous border spanning around 2,500 kilometres with several crossing points, which hold significance as a key element of regional trade and relations between the people across both sides of the fence.

The issue of terrorism remains a key issue for Pakistan, which has urged Afghanistan to prevent its soil from being used by groups such as the TTP to carry out attacks inside the former's territory.

Last week, Interior Minister Mohsin Naqvi visited Afghanistan and held various high-level meetings with Kabul's leadership, where both sides agreed to bolster bilateral cooperation to curb terrorism and manage their shared border more effectively.

He also met with his Afghan counterpart Sirajuddin Haqqani, where the two leaders underscored the importance of peaceful coexistence, regional stability, and enhanced collaboration between both nations.

Discussions focused on bilateral relations, with a particular focus on counterterrorism, cross-border infiltration, and the proscribed Tehreek-e-Taliban Pakistan (TTP).

They also explored strategies for efficient management of the Pakistan-Afghanistan border, curbing drug trafficking, and regulating cross-border movement.

Besides, the repatriation process of Afghan nationals residing illegally in Pakistan was another key topic of discussion.

Speaking on the occasion, Naqvi stressed that terrorist organisations are fueling unrest and instability, and that both countries must work together to eliminate such threats. He reaffirmed Pakistan’s commitment to fostering fraternal and enduring relations with Afghanistan.

He also highlighted Pakistan's decades-long hospitality towards millions of Afghan refugees, noting that the country's doors remain open for Afghan citizens arriving through legal channels.